Green Hydrogen to outperform Fossil Fuels in the near future

A new report issued by the consulting firm Wood Mackenzie, predicts that green hydrogen will play a major role in the overall energy mix sooner than many experts have predicted.

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Chile Desarrollo Sustentable

 

 The report "2050: The Hydrogen Possibility" details how the project portfolio has increased nearly ninefold since October 2019 to reach 26 gigawatts. This is encouraging many governments to set very ambitious strategies, aiming for a 66 GW production. 

 

Last month, electrolyzer manufacturer Nel set a target of US$1.5/kg by 2025, a price level that would outperform traditional fossil fuel-based options. This drop in prices (currently around €4/kg) will be one of the main drivers of growth.

 

 

Green hydrogen to outperform fossil fuels faster than expected 

Predictions about when green hydrogen might become competitive with existing high-carbon production methods continue to accelerate. "This will move faster than anyone is predicting, including us", says Ben Gallagher, senior analyst at Wood Mackenzie and author of the report, in an interview.

 

The European Union aims to reach a production capacity of 40 GW through the deployment of electrolyzers by 2030. 

 

France is considering a 6.5 GW production and both the UK and Germany have also set their own targets of 5 GW. At the same time, major utilities such as RWE and Iberdrola have joined oil companies Shell, BP and Total in developing major early-stage green hydrogen projects. 

 

 

 "The European Commission's hydrogen strategy didn't exist a year ago; the German strategy didn't exist a year ago, or that of the Netherlands, Spain, Portugal, China didn't have a net zero goal for 2060," Gallagher continues. "The change in US leadership, with President Joe Biden and Vice President Kamala Harris promising an aggressive action to decarbonize the world's largest economy, will also help," he concludes.